American manufacturers are facing an energy crisis. Despite the U.S. being the world’s largest natural gas producer, manufacturers are increasingly being cutoff from natural gas supplies during periods of peak winter and summer demand. The critical challenge is a lack of pipeline capacity to meet the competing needs of power generation, heating and manufacturing. And unfortunately, the situation is deteriorating.
The rapid addition of gas demand from power plants, data centers, crypto currency and booming LNG exports is mounting far faster than the ability to meet those competing needs with natural gas alone. For manufacturers, gas unavailability is shuttering operations for days at a time and making the addition of new facilities impossible.
The Wall Street Journal recently painted an alarming picture:
“As frigid weather swept over the mid-Atlantic region late last month, Evonik Industries’ plant in Havre de Grace, Md., received notice from its local utility: Shut off the gas or risk huge financial penalties.
Workers at the Evonik plant were dispatched to close the gas supply valve into the factory, where the German chemical maker produces silica for toothpaste and food products.
Without gas for its manufacturing process, the plant ceased production. Emergency heaters were fired up so equipment didn’t freeze. Workers were assigned maintenance tasks until the gas could flow again. The outage lasted seven days.”
This forced suspension of production was repeated many times over across the country. In fact, pipelines curtailed gas supply to manufacturers more than 40 times last year according to Paul Cicio, the chief executive of Industrial Energy Consumers of America, a trade group with members that operate more than 12,000 U.S. manufacturing facilities. He warns that this year is going to be even worse.
Cicio also told The Journal that tally doesn’t include the manufacturers that are forced to all but halt production when spiking natural gas prices render their operations unprofitable. With gas supplies so tight during peak demand – exactly what much of the country saw this January – spot gas prices soared to some of the highest prices on record.
Essential Dispatchable Optionality
The obvious question is what’s the solution? Along with a rapid expansion of pipeline capacity – which appears unlikely, especially where it is needed most – manufacturers have repeatedly had a single ask: keep the coal fleet available.
The coal fleet is critically important to alleviating pressure on natural gas demand. The key moments when gas demand spikes and manufacturers are left without supply or face untenable prices happen to also be when renewable generation has historically faltered. Bitter cold and winter storms are a poor match for solar generation and battery storage. Summer demand spikes from soaring temperatures often come with still air and a collapse in wind generation when it is needed most.
Coal power – uniquely as an alternative to natural gas – can surge electricity onto the grid during periods of peak demand. Further losses of coal plants, at precisely the moment power demand and natural gas demand are growing rapidly, would be a crippling own goal. Dispatchable fuel diversity underpinned by the coal fleet is essential. Coal’s role as price shock absorber last year underscored it.
In 2025, in response to rising natural gas prices, coal generation rose 12%, easing gas demand. That optionality in the electricity marketplace saved U.S. energy consumers $30-40 billion dollars. Savings were most concentrated during periods of peak demand when increased coal generation was able to shield consumers from natural gas price spikes—the very price spikes that accompany constrained gas supply wreaking havoc on U.S. manufacturers.
The coal fleet is a grid reliability backstop for much of the country. Reason enough to ensure further plant losses are avoided. But we must not lose sight of the fleet’s ongoing role underpinning dispatchable fuel diversity and energy affordability. America’s manufacturers certainly aren’t.
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